One of South Africa’s top stock market analysts, Anthony Clark, has slammed the Competition Commission’s market inquiry into the poultry sector as “a joke” and “a travesty”.
In a highly critical podcast, Clark said the poultry industry was vital for the country’s food supply. The government should be assisting and supporting it, instead of instituting an unnecessary market inquiry.
“The chicken industry is a R70 billion industry. They are material employers and, along the value chain, they are significant contributors to society – more than can be said for the government that is currently investigating the poultry sector,” he said.
This was the same government that had created the poultry master plan several years ago.
“When it no longer suited them, they basically shredded it, throwing the chicken industry into the mincer.”
Food companies were not, as the government seemed to think, charitable organisations.
The chicken industry operated on very thin margins, had substantial capital requirements and had faced significant input costs, including failing water and electricity provision, and crumbling roads in rural areas where they provided large numbers of jobs.
Clark noted that the government, through the Pubic Investment Corporation (PIC) had invested billions in Daybreak, a poultry producer now in business rescue after “horrific stories of corruption, malfeasance and animal cruelty”.
“The government, and bodies like the DTIC (Department of Trade, Industry and Competition) and the Competition Commission have no cause to question the veracity and integrity of the domestic chicken sector when they can’t run their own chicken business.”
While the government had the right to investigate areas where they thought there might be market concentration, it should not miss the bigger picture.
“If it wasn’t for the protein from the 22 million chickens a week that domestic producers provide to the market, people in this country would go hungry,” Clarke said.
“The government should be assisting the poultry sector, fixing infrastructure, making reliable water and reliable electricity, and creating the economic growth that would enable these companies to invest to create jobs and provide affordable protein to the masses.
“All in all, I think this inquiry is a joke,” Clark concluded.
